Agression to passersby

My 2 years old Hovawart started a few months ago to growl at and threaten passersby. As a pup he was very friendly and curious and liked to socialise with people. I have no idea what event triggered that behaviour. Even seeing someone coming nearer from a distance makes him become very tense. I'm doing SAR training with him for about seven months. He is very good at it and behaves well during training towards people, however his behaviour towards the other dogs is rather dominant. While working he is so focused that he doesn't care about other dogs, people or other distractions, he just wants to find the victim. I'm mentioning this because perhaps this has something to do with this change in behaviour allthough I don't see why and how. Anyway for me this is a serious problem because I'm avoiding walks where there is a chance of meeting lots of people. What I do now is rewarding him when he lets someone pass by without doing anything and I reprimand him when he doesn't. I sometimes make him lay down when someone is coming but perhaps this isn't a good idea. Apart from that he's very kind to people and children he knows

First off, is your dog neutered? It may be something to consider doing if not...

2 years old seems a strange age to suddenly have issues with people around on walks, especially when he was friendly up til now. Have any of your friends or relatives walked him in the recent past? Or was he boarded/kennelled/somewhere other than home for a while?

Either way - I'd advise you to keep doing what you're doing! Continue taking him on walks, continue rewarding passive behaviour and verbally reprimanding aggressive acts. Having him sit or lay down as someone approaches is actually a very good thing to do - its how I trained my own dog to not be so excited about people approaching, and it works for aggression as well. Once he's sitting, keep his attention focused on you - call his name, give commands, snap your fingers - anything to maintain eye contact. Keep saying good boy while he behaves. Once the person is gone, give him lots of praise and pats for behaving so well!!

You could also look into socialization classes or a dog walking group - muzzles may be advised at first, but a fun place to be around other dogs and people (and not working) should help him as well. He's still young, so if you stick to it and show him he gets good things for being a good boy, I'm sure he'll show progress in no time!